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Layoffs and shrinking job market: Is this the end of India’s engineering dream?

A month ago, Himanshu Sharma was asked by his company, Cognizant, to resign. His services were not required any longer, he was told. It came as a surprise to Sharma, who was hired less than a year ago. “I hadn’t expected to lose my job as I was still a fresh hire for them. I was given two options by the company: to either resign and serve the usual notice period or leave within a week and take home a severance package,” he says. Within a few days, after he refused, things turned worse. Sharma claims he was threatened by an HR executive, who asked his colleague to “snatch my identity card and kick me out”.

Sharma is one of the several thousands of Indians who go to engineering colleges to realise their dream of a good life. The 29-year-old software engineer and a father of one has more than six years of experience. After graduating from a college affiliated to Uttar Pradesh Technical University, he climbed up the ladder from a little-known Information Technology (IT) service firm in Delhi to IBM and then to a well-paying job at Cognizant, an American multinational corporation in Bengaluru. The company provides digital, technology, consulting, and operations services.

‘It’s mayhem in India’s IT sector’, screams a newspaper’s headline as major IT companies reportedly are on the look out to slash hundreds of jobs. Mint reported last week that the top seven IT firms in India including Infosys, Wipro and Cognizant will lay off at least 56,000 employees this year. The numbers were collated after extensive interviews with 22 former and current employees of the seven companies. Many employees have already been axed or have been asked to resign — Tech Mahindra and Wipro reportedly firing 1,000 and 600 employees respectively.

Signs of trouble were visible early this year when online forums were abuzz with speculation about the job market and impending crisis. In April and early May this year, online forums like Quora and Facebook groups, which receive queries from registered users, had questions that ranged from concern to calls of distress. Questions like“Is it true that Cognizant is planning a mass layoff in the upcoming months?”, “Why did Cognizant lay off 6000 employees?” and “What is automation and how is it affecting the layoffs in the IT industry?” were posted on the website.

Then there were those who were concerned about H-1B visas issued by the United States to Indian workers: “What are my options if I get laid off now and am on H1-B already?” “I was laid off on an H1B. How much time do I have?” On April 18, the American president Donald Trump had ordered a comprehensive review of the H-1B visa programme, the way by which American companies hire high-skilled foreign workers. The multiagency review will be in line with Trump’s protectionist policy ‘to buy American and hire American’.

About half of all H-1B visas have been given to Indian nationals between 2001 and 2015, according to Pew Research Center. “Most H-1B applications (75 percent) require high-level computer knowledge, and roughly half require significant engineering and math skills,” says the report. India got nearly 70 percent of H-1B visas in 2015, as per US Department of State – Bureau of Consular Affairs.

Last month, Associated Chambers of Commerce of India (ASSOCHAM), the apex trade body in the country, released a paper warning of severe impact on the jobs here. It said that the new norms will affect nearly 86 percent of the H-1B visas that are issued to Indian workers in the IT, scaling down the figure in the ‘computer space’ to ‘about 60 percent or even less’.

This in turn would hurt remittances coming into the country from the US. Stricter immigration regulations and revision of policies in developed countries including the UK, Australia, New Zealand and Singapore, other hotspots for Indian engineers, would also have an effect on the remittances coming into the country. Slump in construction sector, especially after demonetisation, has affected civil engineering jobs in the country too.

The bubble bursts

IT companies put on the defensive termed the layoffs ‘routine performance-based reviews’, attributing it to both, a marginal increase in poor performers and a more rigorous skill review. Sharma was classified as one of the poor performers in the lowest of categories in bucket IV. Cognizant has reportedly placed 15,000 employees in the same bucket.

However, Sharma contests that more than performance or implications of changing US policies, the cut down is a tactic to increase profits. Forum of IT/ITes Employees, which filed a petition to the Labour Commissioner in Hyderabad and Chennai on behalf of the sacked employees, has a similar opinion, claiming that the entire process is illegal.

The job market isn’t likely to recover soon. Head Hunters India, a talent search firm, warns of job cuts in the IT sector to the range of 200,000 annually, for the next three years. Global advisory firm McKinsey & Company’s report declared that about half of the workforce in IT will be rendered ‘irrelevant’ in the next three to four years. This is blamed on the under-preparedness of the industry to adapt to newer technologies.

“IT is particularly hurt as automation is taking away low skilled jobs. In Mechanical [engineering] we are already past that point. Today, when you go to a car company you don’t see many people working, it’s just robots,” says Dheeraj Sanghi, a former dean of academic affairs at Indian Institute of Technology (IIT) Kanpur. “The bubble has been there for some time and it had to burst. That bubble has burst today.”

Since 2014, engineering employment has increased at just 0.6 percent — adding just about 16,000 software engineers to the existing workforce according to Federation of Indian Chambers of Commerce and Industry (FICCI) — in comparison to the overall workforce that grew at a pace of 7 percent per year.

It is not just the software engineers who are staring at a grimmer future but a similar situation exists in other sectors of engineering as well.

Kamal Singh, former director general, National HRD Network, an association of HR professionals, says, “Disruptive technology such as 3D printing or Internet of Things (IoT) is impacting the job scenario everywhere, be it mechanical or civil or any other engineering stream. It will move from bad to worse in time to come.” 3D printing is a manufacturing process that creates a physical object from a digital design while IoT is about connecting devices over the internet allowing them to be controlled over the internet.

It is estimated that India produces around 1.5 million engineering graduates, of which only 500,000 are absorbed into the market while the rest remain either unemployed or under-employed. That raises concerns about the quality of engineers produced.

The fourth edition of the National Employability Report for Engineers, 2016 by Aspiring Minds, an employability evaluation and certification company, found that only about 18 percent of engineers were employable for the software services sector. The rate in all other sectors — civil to mechanical — was 7 percent or less. The report is based on a sample of more than 150,000 engineering students from 650+ engineering colleges who appeared for AMCAT: Aspiring Minds Computer Adaptive Test.

According to a recent report by HT, campus recruitments at IITs have taken a beating too. The story reported on how campus hiring in the IITs had fallen to 66 percent this year from last year’s 79 percent, a reflection of the economic downturn in the country. In December last year, President Pranab Mukherjee had expressed concern over employment generation saying India is witnessing jobless growth, lowest in the past seven years. International Monetary Fund, in April, trimmed India’s annual growth forecast to 7.2 percent for 2017, citing the impact of demonetisation while a UN report pegged the figure at 7.1 percent.

The engineering dream

The great Indian engineering dream, however, continues to trap unsuspecting parents and students alike. Thousands of students are prepped from a young age and pushed into a punishing study regime.

Fuelled by middle and lower middle-class ambitions of social mobility, every year, coaching meccas such as Kota and Nellore receive lakhs of students aspiring to become either an engineer or a doctor. Parents spend a fortune to get their children into expensive coaching classes. They take loans, sell their land or at times even move with them to the cities, all in the hope of getting their children into a good institute. And once that happens, college fees and living expenses further wring the parents’ savings.

Ankit Arora spent more than ₹800,000 on getting a BTech degree in Mechanical Engineering from a private university but when the time came for job placements, he struggled for two years to find any. Eventually, he decided to go for higher education. “I did an MBA, from another private university, in the hope to get a job,” says Arora. “Now, I work as a marketing executive to earn ₹18,000 per month.”

Similarly, Mukesh Bhatt spent all his life savings, about ₹220,000 on his son’s education in a reputed engineering institute, VIT (Vellore Institute of Technology) University in Vellore. Based in Dubai at the time, Bhatt had paid more than the average parent as his son qualified only under the quota for NRIs. After graduation, Bhatt’s son couldn’t find a job based on his skill set and had to opt for an opening in the BPO sector in New Delhi.

So why then is engineering big in India? Are there enough opportunities for thousands of engineers graduating from hundreds of institutes? Has India produced too many engineers — and of low quality — than it needs? Is the country witnessing the death of the engineering dream?

The country has come a long way since May 1950, when the first IIT was established in Kharagpur with a mission to rebuild India. It was declared as “an institute of national importance”. At its first convocation, Jawaharlal Nehru had said:

“There is going to be no lack, in India, of trained people having opportunities of doing worthwhile work. If there is some difficulty, it means that our organisation has gone wrong — it has slipped somewhere.”

We have slipped somewhere. Perhaps not as much in the case of those who get educated at premier technology institutes in the country, but certainly in the case of those who graduate from one of the many engineering colleges that you discover in every nook and cranny of your town. These colleges seem to serve merely as degree-distributors: a qualification to apply for a job and nothing more.

According to Muni Anandakrishnan, former chairman, IIT Kanpur, the craze for engineering as a career option has led to a “mindless expansion of technical institutions in India”. The institutes affiliated to All India Council for Technical Education (AICTE) are a major chunk of that problem. From 1,511 in 2006-07, the number of engineering colleges under AICTE has more than doubled to 3,288 today. The IITs too have increased from just seven in 2005 to 23 today.

To improve the quality, as suggested by AICTE chairman Anil Sahasrabudhe, there has to be an intense revision of the syllabus and a culture of innovation that will feed startups that will help create more opportunities.

Both Anandakrishnan and Sanghi are of the opinion that it is time we ‘mercilessly cut down on engineering colleges’. In fact, in 2015, AICTE had announced to reduce over 600,000 seats. “We should target to shut down at least 50 percent of the colleges to improve the quality, especially the AICTE-affiliated colleges, the really bad ones,” says Sanghi suggesting that the government should promote non-technical education too.

Not everyone can be an engineer or a doctor. But the government just looks at what will sell, particularly to poor people, believes Sanghi. The Indian government is attempting to starve social sciences and humanities research. Jawaharlal Nehru University, India’s top research hub, has seen a massive cut, by about 80 percent, in MPhil and PhD seats.

This would mean that they won’t be able to admit new students for a long time. Reportedly, other central universities are fearing seat cuts or funding issues in the coming days when they implement regulation that caps the number of researchers a professor can supervise at a time. It is believed in academic circles that these regulations are aimed at cutting funds for research students.

“We do more political propaganda than setting the educational institutions in order,” says MM Ansari, former University Grants Commission (UGC) member. “Modi sarkar promised to reform the regulatory bodies like UGC, AICTE and MCI; and bring a new education policy. This promise has not been fulfilled even after the three years.” According to Sucheta Mahajan, a professor at the Centre for Historical Studies, JNU, in the past few years there has been an attempt by the government to squeeze out the central universities, both financially and otherwise. “And the whole rhetoric here is to catch up with the West and how we should have the best institutions in India,” she says.

American novelist Francine Prose, in a recent opinion piece in The Guardian, wrote that ‘these areas of learning [arts and humanities] provide: the ability to think critically and independently; to tolerate ambiguity; to see both sides of an issue; to look beneath the surface of what we are being told…’

The country perhaps desperately needs to look beneath the surface to understand the problems that plague the education system and produce quality that matches and fuels the country’s shining growth story.(Some names have been changed on request)